1. A company expects to sell 400 units of Product X in January and then expects sales to increase by 10% per month. If Product X sells

1. A company expects to sell 400 units of Product X in January and then expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be $ 2. A manufacturing company expects to sell 12,000 units in August and 15,000 units in September. The company desires to have an ending inventory of 80% of the next month's sales. If inventory on August 1 is 8,000 units, then the company should produce units in August. 3. A manufacturer requires an ending inventory of 5,000 units. Their budgeted unit sales are 20,000 units and beginning finished goods inventor is 3,000 units. The units to be produced is

Answers

1. $13,240

2. 16,000 units

3. 22,000 units.

Explanation:

The question is answered as follows

Part 1: Determine the total sales for the first quarter as follows

January Sales in Units = 400 Units

February Sales Units = 400 x 110% or 1.1= 440 units

March Sales Unites = 440 x 110% or 1.1. = 484 units

Total Sales = 1,324 x $10 = $13, 240

Part 2: Determine Production In August

Production in August making use of the relevant figures

= Expected units + (Expected units in september x 80%) - Inventory on August 1

= 12,000 + (0.8 x 15,000) - 8000= 16,000 Units

Part 3: Determine the Production Units as follows

Sales Units + Closing Inventory of finished goods - The Opening Inventory of finished goods

= 20,000 units + 5,000 units - 3000 units = 22,000 units

1. Sales = $13,240

2. 13,600 units

3. 22,000 units

Explanation:

1. The sales are increasing by 10% every month. So,

January Sales in units = 400February Sales in units = 400 * 1.1 = 440 March Sales in units = 440 * 1.1 = 484January Sales = 400 * $10 ⇒ $4000February Sales = 440 * $10 ⇒ $4400March Sales = 484 * $10 = 4840Total Quarter Sales = 4000 + 4400 + 4840 = $13240

2. The closing inventory for July or opening Inventory for August should have been 80% of August sales,

12000 * 0.8 = 9600 unitsShortfall in Opening Inventory = 9600 - 8000 = 1600 units

The ending inventory for the August should be equal to 80% of September Sales, So

15000 * 0.8 = 12000 unitsSo, August production should be = 1600 + 12000 = 13600 units

3. Let the Units to be Produced be x,

Sales = Opening Inventory + Production - Closing Inventory

20000 = 3000 + x - 5000

20000 + 5000 = 3000 + x

25000 - 3000 = x

22000 = x

$13,240

Explanation:

The computation of the sales in first quarter of the year is shown below:

= January sales units +  January sales units × increased percentage + February sales units × increased percentage

= 400 units + 400 units × 1.1 + 440 units × 1.1 units

= 400 units + 440 units + 484 units

= 1,324 units

So, now the sales is

= 1,324 units × $10

= $13,240

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